Strategy for Readiness and Intention of the Use of
E-procurement in Welcoming Industry 4.0 Study case: PX
Company
CINDHY N. SARI∗
Department of Industrial Engineering, University of
Indonesia, Depok 16424, Indonesia
BOY N. MOCH
Department of Industrial Engineering, University of
Indonesia, Depok 16424, Indonesia
ABSTRACT
Along with the rise of Industry 4.0, the Government is promoting
the Making Indonesia 4.0 program to connect Indonesia to Industry
4.0 and is more ready to compete at the global level, one of which
is by improving digital infrastructure in Indonesia, this is also sup-
ported by PX company by improving digital infrastructure, one
of which is e-procurement. However, in related companies, it was
found that users had a level of brain ware readiness that needed
research in this regard. This study aims to formulate a strategy for
the level of readiness and intentions of e procurement users using
a technology readiness index that refers to the level of technology
adoption depending on the level of intermediate level of readiness
and the technology readiness model and acceptance model showing
significant factors in the adoption of e-procurement technology
are Insecurity and Behavior Intention. The analysis was carried
out by distributing questionnaires to all e-procurement users in
PX company Then the strategy design is carried out using the
Impact-Performance Analysis (IPA) diagram by experts trained on
the use of e-procurement in companies with the contribution of
priority strategies is to change manual input activities to be auto-
mated with integrated e-procurement systems in some forms such
as contract storage with vendor contact information and payment
terms integrated into e-procurement and the integration of features
comparing prices directly from various sellers so there is no need
to search information separately.
CCS CONCEPTS
• Human Centered-Computing; • Data Human computer in-
teraction (HCI); • HCI design and evaluation methods; • User
Studies;
∗ Cindhy,
N.,Sari(cindhy.nafa@ui.ac.id)
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ICIBE 2020, September 27–29, 2020, Macau, Macao
© 2020 Association for Computing Machinery.
ACM ISBN 978-1-4503-8788-0/20/09. . . $15.00
https://doi.org/10.1145/3429551.3429562
20
ANNISA Z. NABILAH
Department of Industrial Engineering, University of
Indonesia, Depok 16424, Indonesia
ERLINDA MUSLIM
Department of Industrial Engineering, University of
Indonesia, Depok 16424, Indonesia
KEYWORDS
e-procurement, industry 4.0, technology readiness and acceptance
model, structural equation modelling, impact-performance analysis
ACM Reference Format:
CINDHY N. SARI, ANNISA Z. NABILAH, BOY N. MOCH, and ERLINDA
MUSLIM. 2020. Strategy for Readiness and Intention of the Use of E-
procurement in Welcoming Industry 4.0 Study case: PX Company. In 2020
The 6th International Conference on Industrial and Business Engineerin (ICIBE
2020), September 27–29, 2020, Macau, Macao. ACM, New York, NY, USA,
5 pages. https://doi.org/10.1145/3429551.3429562
1 INTRODUCTION
Indonesia has a goal to become a major player in industry 4.0 at
the global level, to welcome this the government requires com-
panies, especially state-owned companies, to use e-procurement
technology for the procurement process. E-procurement is an inte-
gration and electronic management of all procurement activities
including buyer requests, granting rights, ordering, shipping and
payment between buyers and suppliers e-procurement is obtained
in order to realize fairness and transparency in doing business as
determined by the government through Presidential Regulation
(Perpres) No. 54 Yr. 2010 concerning the procurement of govern-
ment goods and services. (Presidential Decree No.54 of 2010). One
of the companies that enthusiastically welcomed PT. PX, which
is a company engaged in the chemical industry with agricultural
resources. APPI announced that the level of technology adoption in
domestic fertilizer production is still low, this makes the readiness
of users to use technology must be further improved and it is in
line with the things expressed by e-procurement users that they
have many complaints about the use of the software.
This study aims to examine the level of readiness of users in
the adoption of technology that uses e-procurement systems at PX
company, then this study aims to obtain any factors that influence
the readiness of users for the adoption of e procurement technol-
ogy at PX company. After that the research also aims to provide
recommendations strategic to the Goods and Services Procurement
division related to increasing the intention to use e-procurement.
2 METHOD
The model used in this study is the Lin et al., 2007 research model
regarding the integration model of the technology readiness and
acceptance model. TRAM explains how the dimensions of one’s
ICIBE 2020, September 27–29, 2020, Macau, Macao
Figure 1: Technology Readiness and Acceptance Model Walzuch et al, 2007
personality can influence the way that people interact with technol-
ogy and their use. In the TRAM model proposed by Walczuch et al
(2007) [1]. There are six variables in TRAM namely (a) optimism, (b)
innovativeness, (c) discomfort, (d) insecurity, (e) perceive usefulness
and (f) perceive ease of use. The model of TRAM is shown in Figure
1 intention of e-procurement.
Optimism is defined as a positive view of technology and believes
that technology can provide increased control, flexibility and ef-
ficiency to life (Walczuch et al, 2007). Innovativeness is defined
as the tendency to be a pioneer or a leader in the use of technol-
ogy. Insecurity is defined as the user’s concern in working with
technology and conducting transactions or delivery or information
and discomfort is defined as the perception of lack of control over
technology and the feeling of being burdened by the use of tech-
nology [2]. Perceive Usefulness is defined as the extent to which
individuals believe that using technology will improve performance
[3]. Whereas Perceive Ease of Use is defined as the extent to which
a person believes that using a particular system will be free of an
effort (Davis, 1989) or the tendency of users to believe that using
technology can make work require minimal effort and increase the
effectiveness of the user’s work (Davis, 1989) . Based on the TAM
concept that has been proven through several studies, the ease and
usefulness of technology will bring a tendency to make the use
of technology a habit. TAM aims that perceived ease of use and
perceived usefulness affect the utilization of technology so that [4].
2.1 Research Hypothesis
From the model shown in Figure 1, there are 11 hypothesis regarding
the relationship between variables:
• H1. Optimism positively influences the perceived ease of
use of e-procurement.
• H2. Optimism positively influences the perceived usefulness
of e-procurement.
• H3. Innovativeness positively influences the perceived ease
of use of e-procurement.
• H4. Innovativeness positively influences the perceived use-
fulness of e-procurement.
• H5. Discomfort negatively influences the perceived ease of
use of e-procurement.
• H6. Discomfort negatively influences the perceived useful-
ness of e-procurement.
• H7. Insecurity negatively influences the perceived ease of
use of e-procurement.
21
Cindhy Sari et al.
• H8. Insecurity negatively influences the perceived useful-
ness of e-procurement.
• H9. Perceived ease of use positively influences the perceived
usefulness of e-procurement.
• H10. Perceived ease of use positively influences behavior
• H11. Perceived usefulness positively influences the behavior
intention of e-procurement.
2.2 Research Methodology
An online survey collected from all of the user of e-procurement
in the goods and service division at PX company. The question-
naire uses 5-point Likert scale (1=strongly disagree, 2=disagree,
3=neutral,4= agree, 5 = strongly agree).
After the response were received, the normality, reliability and
validity test conducted. The purpose of this test is to know whether
the user’s response normal or not, reliable or not, and to check the
accuracy of the questionnaire. The reliability and validity test are
done using SPSS Statistic 25 software. The reliability test shown
that the Cronbach alpha for the questionnaire is 0,733 which is on
enough category so the questionnaire is reliable. And for validity
test shown that the Cronbach alpha is 0,716 which is in enough
category that is mean the questionnaire is valid also the normality
test shown that all kurtosis and skewness values are at (-2<x<2).
The number of respondent are 30 respondents which is already
all of the e-procurement users. Table 1 Shows the demographic of
respondents in this research.
Structural Equation Modeling (SEM) is used in this research for
factor analysis and model testing. Structural Equation Modeling
(SEM) is often used in various aspects of knowledge, especially
those involving interrelationships between variables. The most
commonly used estimation method is the Maximum Likelihood.
Some well-known SEM methods are LISREL, weighted least square
(WLS) and partial least square (PLS), this research uses because PLS
presents structural equations where small sample sizes are allowed
and normal multivariate assumptions are not needed. PLS not only
serves to confirm theories that do not yet have a theoretical basis
but also for testing propositions. PLS can also be used as structural
modeling with indicators that are reflexive and formative.
Some steps in modeling using PLS are as follows [5]: (1) De-
signing structural models / inner models, at this stage the problem
formulation is carried out regarding the research hypothesis. (2)
Strategy for Readiness and Intention of the Use of E-procurement in Welcoming Industry 4.0 Study case: PX Company ICIBE 2020, September 27–29, 2020, Macau, Macao

Table 1: Sample Characterization

Sample Characterization Percentage

Position Employees 80%
Vice President 20%
Gender Male 70%
Female 30%
Age 20 – 25 years old 40%
31-35 years old 20%
36 – 40 years old 20%
41 – 45 years old 20%
Experience 6 – 9 years 30%
10 – 12 years 20%
>15 years 10%
E-proc Use Sometimes 10%
Often 30%
Always 60%
Education Bachelor Degree 50%
Master Degree 50%

Designing a measurement model / outer model, at this stage it dis-

cusses whether the indicator is receptive or formative. (3) Building
a path diagram, after obtaining the results of the design of the inner
and outer models, the next step is to build the path diagram. (4)
Convert the path diagram to the equation system. (5) Estimating
parameters or estimations is done by means of iteration. (6) Con-
ducting the Goodness of Fit Test, in this test there is an outer model
test that is the Convergent Validity test to see the correlation be-
tween the score of the reflexive indicator and the latent variable
score, in this test a loading value of 0.5-0.6 is considered sufficient
on the number of indicators per small construct of about 5 to 7
indicators. Then the discriminant Validity (AVE) test that compares
the square root value of AVE in each construct with the correla-
tion between other constructs in the model, if the AVE value is
Figure 2: Technology Readiness and Acceptance Model Ini-
greater than 0.5 then it is considered good, the last is the Composite
tial model
Reliability test to measure whether a variable has a value reliable
composite, the value has been said to be good if it is greater than
0.7. Furthermore, the GoF Inner Model test is measured using R-
Square latent variables. Dependent with the same interpretation as
regression, the model analyzed using Q-square is said to be good After doing composite reliability test, the convergent validity
if the magnitude of Q-Square approaches 1. (7) Conduct Hypothe- test was performed. The result is all of the variable has AVE > 0.5
sis Testing, Hypothesis testing (β, γ , and λ) is done by Bootstrap and Loading Factor > 0.5. Then, Fornell-lacker Criterion Test is
resampling method [6]. conducted to test whether the model has adequate discrimination
√
The figure 2 above is figure of the initial model used for research [7]. The results showed that the AVE latent variable always higher
which will be used to prove the hypothesis. The first step to test is than the correlation with other variables, therefore it can be con-
the Average Variance Extracted (AVE) value that should be more cluded that this research meets the requirements of discriminant
than 0.50. and loading factors should be less than 0.70. This value il- validity.
lustrates adequate convergent validity which means that one latent Then inner model testing is done in several steps, the first step is
variable is able to explain more than half the variants of the indica- calculating determination coefficient R2̂. R2̂ has been used to mea-
tors. Therefore, elimination was carried out on several indicators sure that explained variance of latent dependent variables relative
namely OPT1, INN2, DIS2, DIS3, INS1, INS2, INS3 and EE2. The to the total variance, and perceived ease of use is 0,279, perceived
next step to do was testing the composite reliability. The results usefulness is 0,595 and behavior intention is 0,343. The next step
obtained are all variables have composite reliability more than 0.7, is calculating the predictive relevance Q2̂. The Q2̂ value for this
can be concluded that all of variable in this model are reliable. research is 0,898 which considered as very strong because it is close
to 1.

22
ICIBE 2020, September 27–29, 2020, Macau, Macao Cindhy Sari et al.

Table 2: Hypothesis Testing

Hypothesis Path T-Statistics P-value Support

H1 OPT – PEOU 1,038 0,300 Rejected
H2 OPT – PU 0,847 0,397 Rejected
H3 INN – PEOU 1,836 0,067 Rejected
H4 INN – PU 1,268 0,205 Rejected
H5 DIS – PEOU 0,569 0,569 Rejected
H6 DIS – PU 2,507 0,013 Rejected
H7 INS – PEOU 0,878 0,381 Rejected
H8 DIS – PU 1,993 0,047 Accepted
H9 PEOU – PU 1,487 0,138 Rejected
H10 PEOU – BI 0,230 0,818 Rejected
H11 PEOU – BI 2,299 0,022 Accepted

From the path coefficient, can be concluded that there are 2
main determinants of the using intention for e-procurement are
insecurity by 0,379 and perceived usefulness 0,507.
Goodness of Fit (GoF) on PLS-SEM was done to assess the overall
fit of the model. It can be defined as how well the specified model
reproduces the observed covariance matrix among the indicator
items. The calculation of GoF done by using this formula:
√
GoF = AV E x R2
The result shows that the Goodness of Fit for this model is 0,518
which considered as large because (>0,36). The last step to do is
Multicollinearity testing to test whether the regression model found
a correlation (strong relationship) between independent variables
or independent variables. Based on the results of tolerance and VIF,
variable, value tolerance> 0.10 and VIF <10 so that the model is
considered valid.
2.3 Hypothesis Testing
Hypothesis testing can be done by looking at the t-statistical and
probability values. The significance of the outer model parameters
can be of the outer model parameters can be evaluated through the
bootstrapping procedure found in the SmartPLS 3 software. In PLS
the number of replications recommended is 5000 resampling [8].
Then the t-statistic output value and the probability obtained
are compared with the critical value to determine whether the
hypothesis is accepted / rejected. To test the hypothesis using is
accepted / rejected. To test hypothesis using the t-statistic value.
To reject/accept using probability, then H1 is accepted if the value
of p <0.05. From this test, 2 hypotheses were proven to be related.
The result of hypothesis testing given in Table 2
This study uses an impact performance-analysis diagram (IPA)
as the process of planning strategy. IPA was first introduced by Mar-
tilla and James (1977) with the aim of measuring the relationship
between consumer perceptions and the priority of improving prod-
uct / service quality, also known as quadrant analysis. Importance
Performance Analysis is used to map the relationship between in-
terests and the performance of each of the attributes offered and
the gap between performance and expectations of those attributes.
3 RESULT
Based on result of hypothesis testing that shows H8 and H11 are
accepted, H8 is related to insecurity negatively affects the perceived
usefulness of the use of e procurement technology which means
e-procurement users and user skepticism about the ability of a
technology to work well [9] proved to be negatively significant
influences someone to believe that by using the e-procurement.
And H11 is related Perceived usefulness positively influences the
behavioral intention to use e-procurement.
In formulating strategy, researcher use TRAM results and ac-
cepted hypothesis to define the formulating strategy planning is
done first by determining the attributes associated with variables.
In this study, researchers used experts to determine strategy priori-
ties and in this case the experts are the vice president in goods and
service procurement.
Strategy recommendations were made using the IPA method
discovered by Martilla and James in 1977, recommendations are
made based on the level of acceptance of user technology and are
adjusted to the circumstances of the company based on the results
of interviews with practitioners. Based on the results of the IPA
diagram analysis, the company can determine the priority strategy
recommendations that are strategies that are in quadrant A that
is concentrate here that is changing the manual input activities
to be automated with integrated e-procurement systems. Prior to
e-procurement the company used a manual system and e-mail
application as a tool in procurement activities. However, since the
e-procurement software has been used the procurement process
has improved. However, there are still a number of processes that
would be better if integrated, such as at the purchasing and payment
stages, it would be better if storing contracts with vendor contact
information and payment terms integrated in e-procurement and in
the receiving and bidding processes would be easier if users could
compare prices directly from various sellers so there is no need to
search for information separately.
4 CONCLUSION
The result of this research shows that the insecurity and per-
ceived usefulness is significant affecting the intention of using
e-procurement. The result also concludes the better way to increase

23
Strategy for Readiness and Intention of the Use of E-procurement in Welcoming Industry 4.0 Study case: PX Company
the intention of using e-procurement changing manual input activ-
ities to automatic by integrating the e procurement system.
ACKNOWLEDGMENTS
This research was supported by Universitas Indonesia through
grant of Publikasi Terindeks Internasional Prosiding (PUTI) NKB-
1075/UN2.RST/HKP.05.00/2020. All data collection was done in
Ergonomics Centre and Human Factors Laboratory, Department of
Industrial Engineering, Universitas Indonesia and all researchers
are affiliated with Universitas Indonesia.
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